Net Neutrality Debate Heats Up Again With Both Sides Raring To Go

Advocates and opponents of Federal Communications Commission (FCC) Chairman Tom Wheeler's third set of net neutrality rules continue to express their support or disapproval over the most contentious provision outlined by the FCC chief.

Following Pres. Barack Obama's public call for the re-classification of Internet service providers (ISPs) as common carriers under Title II of the Communications Act of 1934, Wheeler announced that the third set of net neutrality rules, which are set to be voted upon by the FCC, on Feb. 26, will push for classifying ISPs such as AT&T, Comcast, Time Warner and Verizon as public utilities subject to regulation, but without the 80-year-old language that subjects ISPs to rate regulation, tariffs, and last-mile unbundling.

This has sparked off an intense debate that could last long after the FCC has voted any net neutrality rules into place. One of the most prominent arguments by opponents of Title II reclassification is that placing ISPs under telephone-style Title II regulation will hamper investment and innovation.

According to figures by the Progressive Policy Institute cited by Christopher Yoo, founding director of the Center for Technology, Innovation and Competition of the University of Pennsylvania, AT&T and Verizon alone have spent more than any other non-financial company in the United States, creating more than 860,000 jobs in the process under the forces of a regulation-free broadband market. By comparison, their counterparts in Europe, which are subject to the same regulation the FCC is now seeking, have spent less than half in investments.

"The risks for network providers are apparent," said Yoo in an op-ed piece in Fortune. "The effect of telephone-style regulation would be to limit the packages that networks can offer and threaten providers that deviate from the status quo with possible fines."

Yoo acknowledged that Wheeler promised to "forbear" from outdated regulatory measures the telephone industry is subjected to, but he said the FCC has yet to develop a concrete framework that will ensure ISPs safe from investment-dampening practices.

Leo Gonick, CEO of OneCommunity, an ISP providing 1 Gbps Internet service to Western Case University and around 1,800 other public benefit organizations, pointed to the soaring ISP stocks on the day Wheeler announced the proposed rules as evidence that regulation, tweaked to suit the needs of the 21st century market, will not deter investment.

"The way I choose to read that -- because investors in these companies are saying this will now provide an opportunity for cable companies to have a predictable path, because the rules will actually provide guidance that make it safe not just for the adventurous investors but for the institutional investors as well," Gonick said in an interview with Scientific American.

Gonick suggested network neutrality would be the catalyst for investments leading to bandwidth upgrade, leading to the growth of startups, such as those in the health, cloud and mobile services industries, which were previously constrained due to limited bandwidth, as opposed to the current situation where growth is currently seen in terms of mergers and acquisitions.

In a letter sent to the FCC, Republican Rep. Vern Buchanan of Florida told Wheeler that Americans have already too many limits imposed on their freedoms, and that regulating the Internet is comparable to the actions of dictatorial governments such as "China, Iran, and North Korea." This was seconded by former FCC commissioner Robert McDowell, who, in an op-ed piece published in the Wall Street Journal said regulating the American Internet turns the U.S. into a hypocrite as it continues to oppose censorship in totalitarian regimes.

"By creating an irreconcilable contradiction between America's domestic and foreign policies, the cause of an open and freedom-enhancing global Internet will suffer," McDowell said.

This, however, is not necessarily true. As United Nations tech policy ambassador Daniel Sepulveda said, American policy on foreign Internet is aimed at promoting freedom of expression and the free flow of information online. The proposed set of net neutrality rules, on the other hand, is directed at preventing ISPs from controlling who gets quick access to the Internet and whose speeds are restricted based on their ability or inability to pay.

"There is a distinction between Internet access and the content and services delivered over the Internet, which is what people generally think of as the Internet," said Sepulveda. "We remain steadfast in opposing regulation of the content or services through international multilateral bodies."

Little considered among the many effects of net neutrality regulation are the risks for content providers, who are said to be the biggest beneficiaries of such rules, should they be approved. Yoo said privacy restrictions under telephone-style regulation could undermine the business models of many Internet services. Facebook, for instance, makes money by showing advertisements to users based on individual profiles carefully curated from the information users provide and their Facebook-using habits. Google also makes majority of its fortune tracking the searches of its users and showing them similar targeted advertisements.

Moreover, Yoo said there is no guarantee for content providers to benefit from any such rules from the FCC since the next administration could simply reverse the rules, according to the U.S. Supreme Court. The solution, he said, is to call upon Congress to draft new net neutrality rules to eliminate the threat of expansion of regulation and ensure that any rules put in place are not reversed by the next FCC.

"The leaders of both political parties have the chance to act like statesmen and take steps to ensure that the vibrant atmosphere that has promoted innovation and investment so effectively can continue to thrive," Yoo said.

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